TIDMALO
RNS Number : 1453X
Alecto Minerals PLC
17 November 2014
Click on, or paste the following link into your web browser to
view the associated PDF document:
http://www.rns-pdf.londonstockexchange.com/rns/1453X_-2014-11-16.pdf
Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Exploration & Development
17 November 2014
Alecto Minerals plc ('Alecto' or the 'Company')
Low Cost Acquisition of the Advanced Kerboulé Gold Project in
Burkina Faso
Alecto Minerals plc (AIM: ALO), the AIM quoted mineral
exploration company focussed on West and East Africa, is delighted
to announce that it has further enhanced its portfolio of gold
projects in West Africa by entering into an agreement with Kaizen
Discovery Inc. ('Kaizen') ('Agreement') for the acquisition, by way
of all share consideration, of 100% of Gazelle Resources
Incorporated ('Gazelle') which wholly owns the 399.5 sq. km.
Kerboulé Gold Project ('Kerboulé' or 'the Project') located in the
highly prospective Birrimian-age Djibo gold belt in northern
Burkina Faso ('the Acquisition').
The Acquisition is in line with the Company's strategy to
identify attractive opportunities and to seek to add value to such
projects at a low cost in order to expand its mineral resource
portfolio with a view to achieving future production and strategic
alliances.
Highlights:
-- Extensive exploration and artisanal mining at Kerboulé has
highlighted the presence of wide gold mineralisation with high
grade shoots across the tenure
o Wide mineralisation demonstrated by long intercepts including
26 metres @ 2.37 g/t Au, 20 metres @ 2.39 g/t Au and 40 metres @
1.94 g/t Au at Kerboulé South, and 38 metres @ 3.95 g/t Au, 29
metres @ 4.0 g/t Au and 5 metres @ 3.74 g/t Au at Kerboulé
North
o High grade shoots are evidenced by bonanza grades including 1
metre @ 188.11 g/t Au, 2 metres @ 29.12 g/t Au, 1 metre @ 93.49 g/t
Au and 1 metre @ 86.48 g/t Au
-- Previous work has highlighted additional drill-ready targets,
representing a further source of potential value upside
-- The Acquisition includes a fully equipped exploration camp at
Kerboulé and an office in Ouagadougou, the capital of Burkina Faso,
and bolsters Alecto's existing inventory of in-house exploration
drilling equipment, thereby facilitating the low-cost advancement
of targets and resource-level drilling
-- Excellent location with positive in-country dynamics for
miners and close proximity to other producing projects
o Kerboulé lies on the same regional trend, just 20km along
strike, from the 5 Moz Inata gold mine owned by Avocet Mining plc
which produced approximately 118,000 oz Au in 2013
-- Initial consideration of GBP350,000 to be satisfied through
the issue of 54,996,857 new ordinary shares of 0.01 pence each in
the capital of Alecto ('Ordinary Shares') at a price of 0.6364
pence per Ordinary Share
-- Deferred consideration of US$1.5 million to be paid in shares
or cash, at Alecto's sole discretion, on Alecto attaining at
Kerboulé:
o the definition of a JORC-code compliant inferred resource or
equivalent of 1 Moz Au at a minimum cut-off of 0.5g/t Au, or
o a JORC-code compliant proven reserve or equivalent of 250,000
oz Au at a minimum cut-off of 0.5 g/t Au, or
o production of the first 75,000 oz Au from gold mining
operations
-- Kaizen is a Canadian-based technology-focused mineral
exploration company. Kaizen's divestiture of the Kerboulé gold
project is aligned with its strategy to build a portfolio of highly
prospective base-metal projects within the Pacific Rim.
-- The Company believes that Kerboulé is ideally positioned for
the definition of a preliminary JORC resource estimate - this, as
well as on-going resource expansion, will be the near term focus to
provide the basis for commencing a preliminary economic assessment
('PEA')
Alecto's CEO, Mark Jones, commented:
"This low-cost, all share, strategic acquisition of the advanced
and prospective Kerboulé Gold Project in Burkina Faso is a timely
addition to our portfolio and in line with our strategy of
acquiring complementary assets and rapidly seeking to unlock value
at low cost. We believe that Kerboulé is capable of delivering
significant returns for the Company and this Acquisition
strengthens our asset portfolio by exposing our shareholders to a
highly exciting project in a new territory, with extensive existing
data and upside potential.
"Alecto has demonstrated that it is capable of delivering
resource ounces at a very low cost, and turning acquisitions into
desirable joint venture projects. Accordingly, we have a clear plan
to establish a maiden resource at Kerboulé and thereafter expand on
it while we identify and assess the earliest route towards
monetisation.
"Whilst Burkina Faso may have been in the news recently due to
the popular uprising that saw the departure of long-time President
Blaise Compaoré, after 27 years in power, the country is now
transitioning towards a newly elected government. Burkina Faso has
already shown that despite the political changes it has remained
open for business and our first class contacts and network
in-country will allow us to operate effectively."
Kerboulé Gold Project
Kerboulé comprises two contiguous exploration permits, "Arae"
and "Gassel-Manere". The permits cover 399.5 sq. km. across the
Birrimian-age Djibo belt and are cross-cut by two known mineralised
trends (the Inata and the Souma Trends).
The quantity of work completed on the project to date is
extensive and includes:
-- Airborne Total Magnetic Field, ground magnetic and Induced Polarisation geophysical surveys
-- Trenching, rock chip, pitting, termite mound sampling and soil geochemistry
-- 19,026 metres of rotary air blast ('RAB') drilling
-- 3,420 metres of diamond core drilling
-- 26,603 metres of Reverse Circulation ('RC') drilling
-- Over 6,000 auger drill samples
-- Preliminary metallurgical test work on oxide material
It is the Company's intention to undertake a preliminary JORC
resource estimation and to then utilise its technical team's
well-practiced low-cost exploration techniques to expand on this
resource. This will provide a solid basis from which to then
commence a PEA.
Figure 1: Kerboulé Licence Areas and Proximal Projects
Kerboulé is an exploration play with a clearly defined
mineralised structural corridor located along strike from the Inata
gold mine (Avocet Mining plc). Previous exploration activities
focussed predominantly on anomalies lying within the
Kerboulé-Yalema corridor (the 'KY Trend'), which forms part of the
Inata Shear Zone. These targets include Yalema, Kerboulé North,
Kerboulé Main and Kerboulé South, all of which lie on the Kerboulé
- Yalema trend.
Within the Inata trend, which is a major regional structure that
cuts the entire West African Craton and hosts the 5 Moz Inata Gold
Mine 20-km to the south, there are numerous gold-in-soil anomalies,
which still require drill testing. To the east of the permit, the
Souma Trend, which is host to Avocet Mining's 780,000 oz Au Souma
deposit, coincides with another vast geochemical and geophysical
anomaly, which also continues along strike into the Kerboulé
project.
Historical drilling intercepted gold mineralisation above a 0.5
g/t cut off in 180 out of 264 RC holes and in all 12 of the
completed diamond drilling (DD) holes.
Prospect No. of RC Holes Total RC metres No. of Diamond Drill holes Total Diamond Core metres
----------------------- ---------------- ------------------ --------------------------- --------------------------
Kerboulé South 152 12,878 5 1,320
----------------------- ---------------- ------------------ --------------------------- --------------------------
Kerboulé Main 34 3,713 3 900
----------------------- ---------------- ------------------ --------------------------- --------------------------
Kerboulé North 52 6,612 3 900
----------------------- ---------------- ------------------ --------------------------- --------------------------
Kerboulé Village 8 700 - -
----------------------- ---------------- ------------------ --------------------------- --------------------------
Yalema 18 2,700 1 300
----------------------- ---------------- ------------------ --------------------------- --------------------------
Total 264 26,603 12 3,420
----------------------- ---------------- ------------------ --------------------------- --------------------------
Table 1: Main prospects and metres drilled at Kerboulé Gold
Project
At Kerboulé South drilling included significant intercepts
of:
-- G09004 - 26m @ 2.37 g/t Au from surface
-- KBS-RC-005 - 20m @ 2.39 g/t Au from 67 metres
-- KBS-RC-010 - 29m @ 7.43 g/t Au from 101 metres
-- KBS-RC-012 - 23m @ 1.27 g/t Au from 13 metres
-- KBS-RC-013 - 40m @ 1.94 g/t Au from 55 metres
-- KBS-RC-017 - 22m @ 1.93 g/t Au from 89 metres
At Kerboulé Main highlights included:
-- KB-DD-001 - 5m @ 4.08 g/t Au from 71 metres
-- KB-RC-002 - 4m @ 4.44 g/t Au from 39 metres
At Kerboulé North highlights included:
-- KB-DD-005 - 38m @ 3.95 g/t Au from 121 metres
-- KB-RC-010 - 29m @ 4.0 g/t Au from 121 metres
-- KB-RC-012 - 5m @ 3.74 g/t Au from 32 metres
RC and DD drilling completed to date has proved the existence of
an excellent low-grade deposit with locally very high-grade shoots.
Several of the targets within the Kerboulé - Yalema structural zone
remain open along strike, and all have demonstrated both oxide and
sulphide mining potential. The low grade, bulk tonnage potential
for this deposit is clear, for example, hole KBS-DD-005 has over
200 metres @ 0.5 g/t. Bonanza grades encountered included 1 metre @
188.11 g/t Au from 127 metres, 2 metres @ 29.12 g/t Au at 86
metres, 1 metre @ 93.49 g/t Au at 121 metres and 1 metre @ 86.48
g/t Au at 137 metres. These short but high-grade shoots require
further investigation to track them and understand their
significance, which will be a priority for this season's
fieldwork.
There are significant potential extensions to all trends within
the permit area with crosscutting structures and an interpreted
fault offset. There are also several untested targets with
extensive artisanal workings and clear geochemical and geophysical
anomalies. Mineralisation in the area of Kerboulé tends to exhibit
a strong correlation with regional structures occurring primarily
with quartz veining and hydrothermal alteration.
Included in the Acquisition, is a fully equipped exploration
camp at Kerboulé and an office in Ouagadougou, the capital of
Burkina Faso. This will enable Alecto's technical team to quickly
get to work on the ground without having to wait for in-country
infrastructure to be established. Additional assets comprise
various vehicles, generators and associated exploration equipment
and a vehicle mounted auger-drilling rig which will complement
Alecto's existing capability to conduct subterranean investigations
at very low-cost. The auger, which can drill to depths of 20
metres, will be used in conjunction with Alecto's RAB drill rig to
quickly and efficiently refine RC and DD drill targets thus
considerably lowering the usual cost of resource-level drilling
going forwards.
The unaudited loss before tax for Gazelle for the eight month
period ended 31 August 2014 was approximately GBP122,000.
Consideration for Gazelle
Pursuant to the Agreement, Alecto will acquire 100% of Gazelle
from Kaizen for an initial consideration of GBP350,000 which will
be settled through the issue of 54,996,857 new Ordinary Shares (the
'Consideration Shares') at a price of 0.6364 pence per Ordinary
Share. The Consideration Shares to be issued to Kaizen will rank
pari passu with the Company's existing Ordinary Shares and
represent approximately 6.25% of the Company's enlarged issued
share capital.
In addition, subject to Alecto achieving either the definition
of a JORC-code compliant inferred resource or equivalent of 1 Moz
Au at a minimum cut-off of 0.5 g/t Au; or a JORC-code compliant
proven reserve or equivalent of 250,000 oz Au at a minimum cut-off
of 0.5 g/t Au; or the production of 75,000-oz Au from mining
operations on the Project, a deferred consideration of US$1.5
million will become payable in either shares or cash, at Alecto's
sole discretion.
Orderly Market Provisions
Under the terms of the Acquisition, Kaizen has agreed that for a
period of 12 months following the date of the Agreement, any
transfer or disposal of the Consideration Shares shall be effected
in such a manner so as to ensure an orderly market in the Ordinary
Shares is maintained.
Application for trading on AIM and Total Voting Rights
Application will be made for the 54,996,857 Consideration Shares
to be admitted to trading on AIM. Admission is expected to become
effective and dealings commence at 8.00 a.m. on 24 November 2014
('Admission'). On Admission, the Company will have in issue
880,075,298 Ordinary Shares.
The Company has no Ordinary Shares held in treasury. The above
figure may therefore be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the Financial
Conduct Authority's Disclosure and Transparency Rules.
**ENDS**
For further information, please visit www.alectominerals.com or
contact:
Alecto Minerals plc Tel: +44 (0)20 3137 8862
Mark Jones
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Richard Tulloch
Matthew Chandler
James Dance
Hume Capital Securities plc Tel: +44 (0)20 3693 1470
Jon Belliss
Abigail Wayne
St Brides Media & Finance Ltd Tel: +44 (0)20 7236 1177
Elisabeth Cowell
Felicity Edwards
Notes to editors:
Alecto Minerals plc
Alecto Minerals plc is an African focussed, gold and base metal
exploration and development company quoted on AIM with exploration
projects in Mali, Ethiopia, Mauritania and, following completion of
the abovementioned acquisition, Burkina Faso. The on-going
development of the Kossanto Gold Project in Mali is the Company's
predominant operational focus and with significant value upside
potential evident across the tenure, the Board plans to build on
its current independent inferred resource estimate of 6.72Mt
grading at 1.14g/t Au for an aggregate of 247,000 oz Au with a
cut-off grade of 0.5g/t Au for the Gourbassi target reported in
accordance with the guidelines of the JORC Code (2012).
Alecto also has a joint venture with Centamin plc over two
prospective gold exploration licences in Ethiopia which sees Alecto
retain exposure to these assets with no capital expenditure
obligations, as well as the wholly owned Wad Amour IOCG Project in
Mauritania which is at an exploration stage. Combined, these
projects provide the Company with a strong, diversified portfolio
with exciting exploration upside potential.
Burkina Faso
Burkina Faso offers an investor friendly environment for mining
companies. Due to its modern and robust mining code, supported by a
knowledgeable and credible mines department, the country
facilitates the rapid development of projects. It is the fourth
largest producer of gold in Africa and is served by essential
mining and exploration service companies. There have been more than
50 >1M ounce gold deposits discovered in Burkina Faso so far and
it was the biggest recipient of exploration expenditure in Africa
in 2012.
On 31 October 2014, the long-serving president of Burkina Faso,
Captain Blaise Compaoré was forced to resign amid a popular
uprising sparked by an attempt to change the constitution in order
to allow him to serve another term in office. The will of the
people was quickly recognised and Compaoré was quickly replaced by
a transitional organisation, which has committed to preparing the
institutions of the state for free and fair elections within 12
months. The country and its administration were back to normal
business within days. This week Lieutenant Colonel Zida, the leader
of the transitional government in Burkina Faso gave full assurances
to the Burkina Faso Chamber of Mines, of which the company is a
member, regarding his and the transitional government's full
support for the mineral exploration and mining businesses and to an
industry that they recognise plays an integral role in the economy
of Burkina Faso.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLFFFLLRLRLIS
Cradle Arc (LSE:CRA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Cradle Arc (LSE:CRA)
Historical Stock Chart
From Apr 2023 to Apr 2024
